BUENOS AIRES, Argentina (AP) — After 13 hours of debate, Argentina's Senate voted early Thursday to overwhelmingly approve a deal with creditors in the U.S., putting an end to a years-long dispute that made the South American nation a hard place to do business and kept it from accessing desperately needed financing.
The deal, reached in late February, had to be approved by Congress. The House of Deputies passed it earlier this month. The Senate began debating Wednesday morning and around 1 a.m. Thursday passed the measure 54-16.
Passage puts an end to a bitter chapter that made Argentina a financial pariah and was often a point of sharp political clashes. It's also a boost for President Mauricio Macri, who campaigned on promises to restart the continent's second largest economy, in large part by solving a dispute so thorny it led to changes in how debt contracts are restructured worldwide.
While Macri's PRO party doesn't control either chamber in Congress, most analysts had predicted the measure would pass because Argentina is strapped for cash and needs foreign investment to begin growing after four years of economic stagnation. Still, it was clear during the debate that nobody would be celebrating.
"I will vote for this because we are complying with a sentence," said Sen. Norma Durango from the opposition Peronist Party. "But I'm not happy or at ease" about it.
Macri's predecessor as president, Cristina Fernandez, had refused to negotiate with the creditors, which she called "vultures" and said were trying to bully Argentina. The issue was a central part of last year's presidential campaign. Macri and opponent Daniel Scioli, Fernandez's chosen successor, clashed over whether a deal was necessary and who would be the tougher negotiator.
The seeds of the dispute go back to 2001-2002, when Argentina defaulted on $100 billion in debt. Most holders of the original debt, along with those who bought up bonds in the aftermath, agreed to swaps in 2005 and 2010 for bonds worth far less. But a group of creditors led by billionaire hedge fund manager Paul Singer refused. They took Argentina to court in New York, where the debt was issued, and won.
U.S. District Court Judge Thomas Griesa in New York repeatedly ruled against Argentina, saying the country had to pay the holdouts before it could pay other creditors holding renegotiated debt. Those rulings kept Argentina from accessing international credit markets, forcing it to issue domestic bonds and search for backdoor financing from countries like China.
During the years of fighting, the initial debt ballooned as other holdout groups began suing and legal fees mounted. The long, costly dispute led to changes in how debt is issued worldwide. Many countries have restructured contracts in attempts to avoid getting into similar situation.
Under the deal negotiated and now passed by Congress, Argentina is to pay $4.653 billion to resolve claims related to the court fight. The agreement would pay the funds managed by Elliot, Aurelius Capital, Davidson Kempner and Bracebridge Capital about 75 percent of their full judgments, according to details released in late February.
Thursday's passage also allows Argentina to take on $12.5 billion in debt, roughly the amount that financial analysts believe the country will need to resolve the various disputes with holdout groups.
"It's much more complicated for the country not to agree (to pay) than to agree," said Sen. Miguel Pichetto, leader of the chamber's Peronist bloc. "The debt could accelerate and go viral."